UNIT 21 Study Guide - a.i. Low Contribution Margin a.ii....

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UNIT 21 1) Operating leverage = Contribution margin/profit 2) Use the operation leverage factor to determine the percentage change in profit for any percentage change in sales volume % profit change= % Sales change x leverage 3) Cost Structure and its effect on profit as volume changes: a. •High Variable Costs as a percentage of Sales
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Unformatted text preview: a.i. Low Contribution Margin a.ii. Low Operating Leverage a.iii. As sales volume changes, profit changes slowly b. Low Variable Costs as a percentage of Sales b.i. High Contribution Margin b.ii. High Operating Leverage b.iii. As sales volume changes, profit changes very quickly...
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This note was uploaded on 01/11/2012 for the course ACTG 241 taught by Professor Staff during the Fall '11 term at James Madison University.

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